What is the difference between mediation and arbitration?
A. Mediation is a cooperative process and uses an experienced neutral third party (a mediator) to facilitate consensus building and discussion, in order to reach a mutually satisfactory resolution. In most cases the results of the mediation are non-binding. Arbitration also employs an experienced neutral third party (an arbitrator), who listens to both sides and makes a decision, which is usually binding.
Arbitration is a private form of adjudication. It is generally less formal than a trial in court. However, an arbitrator’s role is to decide the outcome of the case, and the arbitrator’s decision is binding. In mediation, the parties retain control of the outcome. They design their own settlement, which then becomes legally binding.
Both mediation and arbitration involve a neutral third party who is not a judge. In mediation, the neutral party — the mediator — helps the spouses to negotiate an agreement and has no power to make decisions. In arbitration, the neutral third party — the arbitrator — listens to the facts and then decides the case.
In arbitration, the parties essentially hire a private judge. They can (and usually do) present witnesses and evidence just like in a trial before a judge. The arbitrator makes the decisions, which are legally binding on the parties. In mediation, the parties make the decisions for themselves, with the assistance of the mediator. The parties maintain control over their case in mediation.
